Sundaram Clayton: Winning the Deming Prize

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Case Details:

Case Code : OPER010
Case Length : 11 Pages
Period : 1998 - 2002
Organization : Sundaram Clayton
Pub Date : 2002
Teaching Note : Available
Countries : India
Industry : Automobile Components

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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The case examines the quality initiatives taken up by leading Indian air-brakes manufacturer, Sundaram Clayton to win the world's highest award for quality, the Deming Prize. The company's TQM experience and its preparation for winning the award are explored in detail. The case also provides information about the Deming Prize, its history, its importance and the parameters it is awarded on.

"The Deming Prize is not just a recognition of product quality. It is the recognition of the organization itself. Clearly Sundaram-Clayton meets the requirements of a world-class company."

"There are 3 things that Sundaram-Clayton illustrates. One, total quality is not a prerogative of Japanese companies. Two, Indian workers and managers are capable of international standards. And three, that neither size nor location matters in achieving world-class standards."

- Suresh Krishna, CEO, Sundaram Fasteners Ltd., in November 1998.

Background Note

The leading manufacturer of air braking systems1 in India, Sundaram Clayton Ltd. (SCL) is the flagship company of the US$1.6 billion TVS Group. Named after its founder, T.V. Sundaram Iyengar, the TVS Group began its journey with a small transport business in Chennai (India) in 1911.

Over the years, the group diversified into two-wheelers, automotive components, automotive spares, computer peripherals and financial services. The group was particularly successful in its automotive component and two-wheeler businesses. In 2001, the TVS group had 29 globally recognized companies and an employee base of over 30,000.

Operations Management Case Studies | Case Study in Management, Operations, Strategies, Marketing Management, Case Studies

SCL was established in 1962, in collaboration with UK-based Clayton Dewandre Holdings Plc. (renamed WABCO Automotive), a division of American Standards Inc. for manufacturing air-assisted and air-brake systems for commercial vehicles in India. Over the next few decades, SCL went on to become the principal supplier of air brake systems to the heavy and light commercial vehicle segments of the Indian automobile sector.

The company was the original equipment manufacturer (OEM) for Ashok Leyland and Tata Engineering and Locomotive Company (Telco). Other major clients of the company included Hindustan Motors, Maruti Udyog and Bharat Earth Movers. OEM sales contributed 60% to the company's total sales while the replacement market accounted for an estimated 25%.

SCL used 65% of the castings produced by its foundry division and supplied the remaining (35%) to the group companies or other companies. The company's vast network of over 205 wholesale dealer outlets, situated across the country enabled it to become the leader in the automotive air brake systems market in India and garner a 70% marketshare.

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1] Air brakes, which are found typically in large vehicles, use compressed air to stop the vehicle.


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